The Alex Company,a Consulting Firm,recorded the Following Selected Business Transactions

question 66

Not Answered

The Alex Company,a consulting firm,recorded the following selected business transactions during May,2011.Indicate whether each transaction would increase,decrease,or have no effect on the total assets of the company. $\begin{array}{l}\begin{array}{l}\text { 1. Issued capital stock in exchange for cash contributed by owners } \\\text {2. Paid cash on accounts payable to a supplier. } \\\text {3. Loaned money to an employee } \\\text {4. Borrowed money from the bank on a promissory note payable} \\\text { 5. Collected cash on accounts receivable} \\\text { 6. Purchased a building by using cash and signing a mortgage payable} \\\text { 7. Purchased office supplies on credit} \\\text { 8. Purchased office supplies for cash}\\\end{array}\begin{array}{rl}\text {Increase 1}\\\text {No effect 8}\\\text {Increase 7}\\\text {Decrease 2}\\\text {No effect 5}\\\text {Increase 4}\\\text {No effect 3}\\\text {Increase 6}\\\end{array}\end{array}$

---

Definitions:

Financial Statements

Formal records of the financial activities and condition of a business, person, or other entity, typically comprising the balance sheet, income statement, and statement of cash flows.

Bold-face Type

A font style that is darker and thicker than the surrounding text to emphasize importance.

Footnote

Additional information provided at the bottom of financial statements to clarify or expand on the data presented.

Pro Forma Income

An estimate of the net income and other financial metrics for a future period, based on projected revenues and expenses.